Microsoft Should License Surface Technology and Brand to Partners

by Ben Bajarin   |   June 18th, 2012

Microsoft’s Surface PCs are yet to hit the market so it may sound odd for me to propose what I am about to propose. However, the potential impact of a Microsoft branded tablet for their partners is significant if Microsoft is actually choosing to compete with them. I tend to believe Microsoft may be challenging them and in the process creating some useful and innovative solutions designed to help their partners not compete with them.

Surface PC is being positioned as a new family of computers. There is some truth to that and there isn’t at the same time. This is a class of computer some call convertibles but we refer to them as Hybrids. We have written many articles about this form factor and why we think it is interesting. The key takeaway is that to truly engage in productivity tasks a keyboard is a necessary accessory and we already see demand in professionals and many consumers to use a keyboard with their iPad.

The demand is there and Microsoft believes Windows 8 is uniquely positioned to meet the needs of the customer who wants true tablet and true notebook functionality in the same device–and they may be right. I say that because if there is a sweet spot in the market for a product like Surface, Microsoft is the only one merging touch and mouse / keyboard computing to a single OS. Microsoft may not have been the first to create a product like this but they may be the first ones who make it work.

With all of this context I believe the smartest thing Microsoft can do is license the Surface Brand and many of their hardware innovations like the Touch Cover, Type Cover, Vapor MG, Digital Ink, etc., to any hardware partners who wants to make a Windows 8 Tablet. 


In this scenario Surface could be to Microsoft what UltraBooks are to Intel. Microsoft can influence the specifics of the hardware and provide them with the tools to create Surface PCs. Microsoft could still sell keyboard accessories or perhaps others they come up as well, which is a model they are already successful with.

This path would also allow Microsoft to build the Surface brand and keep all Windows 8 tablets under the same brand. This is a good positioning strategy so consumers are not confused when they see an OEM tablet which is not a surface computer but is similar. Given the youthfulness of the tablet category, and the challenge of a horizontal platform while a market is maturing, the less confusion in the market the better. Given what I have seen so far the best path forward is for every Windows 8 tablet to be a Surface PC whether it has the Microsoft brand on it or not. 

Lastly, this move would not put Microsoft in a position to compete with their partners but rather spur interest in a category that is beneficial to the Windows ecosystem. They can then let their hardware partners take it from there and come up with differentiators that fit the surface computing paradigm.

This direction would require Microsoft to work much closer with their hardware partners going forward. Something I believe Microsoft should have been doing all along and yet they have not. This has led to quite a bit of frustration with some partners to which I have first hand knowledge of.

From what I have seen so far there are enough interesting features to generate interest in Surface PCs. The bottom line is many professionals and some consumers are looking to unite a keyboard with a tablet. For those a Surface PC may be a viable option. However, we believe that even though the hardware is compelling, it will not change the fact that for Microsoft to be successful customers have to want more than the hardware, they have to want Windows 8.

The challenge staring Microsoft in the face is convincing customers Windows 8 is a software platform worth their time, energy, and overall commitment.

The bottom line is I am excited by what I saw. More importantly I am impressed that Microsoft did something bold and took a risk. Whether it works or not, this is the kind of thing they needed to do to stay relevant in the new era of personal computing.

Ben Bajarin

Ben Bajarin is a Principal Analyst at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research. He is a husband, father, gadget enthusiast, trend spotter, early adopter and hobby farmer. Full Bio
  • andrewonedegree

    They wont license Surface out, there are already statements from Microsoft stating this…
    However, I think this is used to ensure Microsoft have a strong presence in the tablet market from day 1 of launch of Windows 8. In addition, I believe that they have aimed their tablets at business users, power users, and directly at iPad users (they havent bothered with the lower end of the tablet market with Surface). Windows 8 will gain traction on the desktop thats a given since all new desktops will come with WIndows 8. As a user, I want the same experience from my tablet (if possible) and you can with Windows 8.
    This is an exercise to ensure Microsoft has a good tablet presence and if anything to focus OEMs on actually being innovative and design aware with their hardware. I also believe this is to indicate to them that they are wasting their time with Android tablets which really have done nothing in denting the iPad market share. In one swoop Microsoft may have launched its own hardware, got OEMs to start thinking about the look and feel of their devices and confine Android to a cheaper end of the mobile phone market only…
    I think Microsoft with Windows 8 may do better than we all expect.
    http://andrewonedegree.wordpress.com/2012/06/19/microsoft-surface-arrives/

    • benbajarin

      Of course they say that now but If I am reading between the lines based on some discussions I have had, it is not entirely ruled out.

      • FalKirk

        You may well be ahead of us all. So much was left unsaid last night that there is a tremendous amount of wiggle room for Microsoft to maneuver in.

  • FalKirk

    “I believe the smartest thing Microsoft can do is license the Surface Brand…to any hardware partners who wants to make a Windows 8 Tablet.”

    That may or may not be Microsoft’s best strategy. But that ship has sailed. Microsoft is releasing a Microsoft branded tablet, come hell or high water…and let the partnerships fall where they may.

    • benbajarin

      Well, I guess I would put it this way. If they care at all about their partners they would let others make Surface PCs. I talked to Ballmer and asked him this question and of course he wouldn’t budge but he did say MSFT believes in an open future.

      • FalKirk

        “If they care at all about their partners they would let others make Surface PCs.”-Ben Bajarin

        Agreed. But I think Microsoft proved last night that they don’t care about their partners.

        “I talked to Ballmer and asked him this question and of course he wouldn’t budge but he did say MSFT believes in an open future.”-Ben Bajariin

        Ballmer’s actions speak louder than his words.

        • jfutral

          I don’t know what partners they have that are worth caring about, except Intel. Oh…

          Joe

  • Rich

    “Microsoft may be…creating…solutions designed to help their partners.”

    Ben, I’ve never seen Microsoft move to help anybody but Microsoft.

    “This move would not put Microsoft in a position to compete with their partners.”
    If Microsoft and their former partners will be selling products with similar hardware running similar OSes, I don’t see how that’s anything but direct competition, and I’ll bet their “partners” will agree.

    • benbajarin

      That is true and this move is a huge test to how Microsoft truly views their role in the future of computing. If they do not take this approach then I am very certain that OEMs will back off this category giving MSFT no support in leaving them to compete with Apple all alone. I personally would not have much faith that MSFT can take on Apple alone, only MSFT may not believe that yet.

  • jfutral

    I think this is a smart way to at least start off. MS may have to show demand because I don’t think MS is going to be able to strong arm any license deals, particularly with tablets, like they used to do, especially with Android now part of the landscape.

    But in a previous life, I am not sure if it was MS who couldn’t come up with a productive strategy or the hardware makers just weren’t bright enough, but didn’t they try this with Plays For Sure and all the other iterations designed to supplant the iPod before the Zune? (I think if MS had come out with the Zune first, that would have been better than repeated failed attempts.)

    I don’t see the large percentage of hardware makers being any more innovative or creative now as then, probably less, as the big money continues to fall by the wayside. A hardware maker (Intel) telling hardware makers how to generally design hardware is one thing. MS will have to demonstrate they know that they have the clout to tell tablet makers how to specifically make their tablets.

    You wrote an article earlier something along the lines of “It’s the ecosystem”. This may be the only way for MS to get that right pretty much close to out of the box and may be the only long term solution, really.

    Joe

  • steve_webb

    Microsoft DOES plan to license the essential surface technology and brand to OEMs. The essential technology and brand is called Windows – not Surface!

    They can get the rest from third party accessory makers.

    Did you watch the Microsoft presentation? It was all smoke and mirrors! The only thing they actually demonstrated was scribbling the word “great” on a PDF file, and underlining some text. Samsung demonstrated the same thing during the SuperBowl. Other than that, all they did was repeat the words “surface” and “perfect” about a thousand times. Did they program you to associate the two?

    They demoed a Surface PRO hooked up to a projector, but they did not demo hooking up the Surface to the projector, nor did they show that particular surface. I guess it is not “Plug and Play” yet!

    They repeatedly demoed how awkward using the Metro home screen is.

    They demoed how the surface recognizes that the stylus is approaching and turns off the touch interface. They got it right on the second try – the first time, the presenter’s hand approached the surface wrist first rather than pen first, and the screen zoomed instead of staying still.

    Just goes to show that Microsoft still has not got the idea of a modeless interface. They needed a different unit for each point they wanted to show. At one point, the presenter forgot to switch units, and was momentarily perplexed that the demo wasn’t working. After an “ah hah” moment, he ran to the big white table, and switched units.

    The videos mostly reminded me of the “Droid” advertisements. Does that mean that Motorola is going to be one of their OEMs? Oh…wait…never mind.

    They demoed one third party app, Netflix, but it could have been the Android version of Netflix. There was nothing surface-y about that demo.

    THEY DID NOT DEMO the very thing that will make or break this product: Microsoft Office. Maybe they were worried that it would not compare well versus Steve Jobs’ demonstration of Numbers and Pages on the iPad.

    I take that back. Office will make or break the Surface Pro. The Surface RT might make it with a decent selection of games. I must have blinked during the games demonstration….

    The final irony: It looked like they used Keynote instead of Powerpoint! Where were the bullets?

    Extra credit for the first responder who can explain the difference between “HD” and “Full HD” better than Microsoft.